NCLT doesn’t have jurisdiction over issues that it’s not licensed to do below the Firms Act 2013 – LexForti Authorized Information & Journal

NCLT has no jurisdiction over matters that it does not have the power to do under the Companies Act 2013: Delhi High Court

Pursuant to Section 434 (1) (c) of the Companies Act of 2013, all cases pending in the District and High Courts of the NCLT are provided that the NCLT has jurisdiction in such cases under Section 241 of the Companies Act Section 430 of the law blocked. By the same lines the High Court of Delhi ruled in the case of Naresh Dayal v. Delhi Gymkhana Club Ltd.explained when the National Tribunal for Company Law has no power over the matter or the cause of the action; it would not delegate the power to rule on these matters.

In this case, seven plaintiffs, who make up the permanent members of the Delhi Gymkhana, filed a representative lawsuit. In the lawsuit, they alleged that the club granted certain groups of people the status of “green card holder”, although this was not provided for in its statutes. According to plaintiffs, the green card option was not extended to children who did not enjoy the club’s facilities as minors, as no such requirement was mentioned in the AOA. Therefore, the plaintiff prayed the Hon’ble Court to explain the extension to the children of all permanent members, regardless of their age and whether or not they had used the club’s facilities as minors.

In response, the club questioned the maintainability of the lawsuit, claiming that the NCLT was the appropriate forum to file such a lawsuit, for which the plaintiff objected on the contrary.

In gathering all arguments and objections, the Court found that the lawsuit did not constitute a suppression or classification of misconduct for the club’s accounts, nor did it seek to dissolve or correct the records. Plaintiffs merely seek equal treatment of all members after membership and permanent disposition against those who are not members but enjoy the activities intended only for those members who are permanent.

These pleas and pleas in law are outside the jurisdiction of the NCLT, even if Section 434 (1) (C) is broadly interpreted.

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